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A trust controlled by Wipro’s billionaire founder Azim Premji raised $150 million in an auction of the Indian software company’s shares, roughly half of the target, clouding the outlook for a newly approved stock auction process.

Wipro, India’s third-largest software services exporter, is the first private sector company to tap the share auction route that was approved in January and was aimed at avoiding expensive roadshows and saving time on secondary share sales.

The share sale came two weeks after state-run Oil and Natural Gas Corp’s chaotic $2.6 billion offering fell short of the government’s target to sell a 5 percent stake in the company as part of its divestment programme.

“It’s shocking that a $300 million book for a company like Wipro doesn’t even get fully covered. It’s less to do with investor appetite and more to do with the process itself,” said a senior equity banker at a U.S.-based bank in Mumbai.

Bangalore-based Wipro, which is also listed in New York, sold 17.8 million company shares for about 7.5 billion rupees in the auction to fund its non-profit arm, said a statement from the founders’ trust late on Wednesday.

Up to 35 million Wipro shares were offered in the auction that could have raised roughly $300 million at the floor price of 418 rupees a share, which was a discount of 4.5 percent on its close price of Monday when the plan was announced.

A total of 24.8 million bids were received in the auction, the exchange data showed earlier. Many bids were rejected as their price was below the cutoff level, said a source with knowledge of the deal.

The floor price was disclosed after the close of the auction process. The Wipro share auction started at 9:15 a.m. and closed at 1:30 p.m.

“The duration of the auction process has to be increased and bids should be accepted overnight so that many overseas bidders can also participate,” said the banker, declining to be named as he was not authorised to speak to the media.

Analysts said investor sentiment for the Wipro auction was also dented by “blind bidding,” with the company opting to disclose the floor price, or the threshold below which the bids would not be accepted, only after the close of the auction.

In January, Securities and Exchange Board of India gave permission to shareholders of the country’s top 100 companies by market value to raise funds by auctioning their stakes via stock exchanges.

Founders of listed Indian companies can also tap the auction route to pare their stakes to meet the capital market regulator’s directive of maintaining at least 25 percent public shareholding.

Premji and his family own about 79 percent of Wipro through various units that include the Azim Premji Trust, which sold the shares on Wednesday. The founders’ stake will drop by roghly one percentage point to about 78 percent after the auction.

Proceeds from the share sale will be used to finance the education activities of the Azim Premji Foundation, a non-profit unit set up by Premji to improve the quality of education in the country, a company statement said on Monday.

Wipro, which develops software applications, integrates IT systems and manages call centres, is India’s 11th most valuable company with a market capitalisation of more than $21 billion. It is part of India’s $76 billion software services industry.

Citigroup Inc, Morgan Stanley, UBS and Credit Suisse were hired by Wipro as brokers for the share auction process.

The BSE Sensex is up 16 percent so far this year, which has helped revive the moribund equity offerings. The benchmark had fallen nearly 25 percent last year, forcing many companies to shelve their share sale plans.

More than $5 billion has already been raised in India share sales so far in 2012, more than half of roughly $9 billion in all of 2011 from 84 issues, Thomson Reuters data showed.